The economy has been opening up, easing the path for MNCs to enter the Indian market in a big way. What should the local manufacturers do? If they don’t innovate, invest in R&D and new product development, and improve quality and pricing standards, local manufacturers stand to lose market share to their more aggressive MNC competitors.
Indian manufacturers can stay competitive in the global marketplace only through innovation. This in turn, leads to better production processes and higher quality products — quality that meets international standards. Indian manufacturers have an added advantage in the form of cost effectiveness, as the wages here are much lower than those offered in more developed nations, thereby, directly affecting the end price of the product.
R&D activities serve as incubators for the new ideas that can lead to new products, processes, and industries. Although they are not the only source of new innovations, R&D activities conducted in industry-run laboratories and facilities are the source of many important new ideas that have shaped modern technology.
Industries that traditionally conduct large amounts of R&D have met with greater success in foreign markets than those that are less R&D intensive, and they have been more supportive of higher wages for their employees. Moreover, trends in industrial R&D performance are leading indicators of future technological performance.
MARKETING STRATEGIES
Most manufacturers are following the strategy of tapping the potential in the domestic market before foraying into the international market. By leveraging the opportunities presented by the domestic market, manufacturers can gain enough volumes to recover the cost of production. And for larger profits the manufacturer can then look at alternate markets. The domestic market also offers manufacturers the option of experimenting with their innovations. Domestic customers have been exposed to international standards and hence have become as demanding as customers from the more developed markets. Hence, if a product doesn’t find acceptance in the domestic market the likelihood of it doing so in the global market place is quite slim. Manufacturers can leverage the feedback it receives from local customers to improve product quality and functionality. Hence, many manufacturers are spreading their marketing network all over India irrespective of the size of the market.
Another aspect that has come to differentiate manufacturers is the quality of service provided by them. Today, product quality more or less matches international standards and are at par. The competition is now on the quality of service and support provided by manufacturers. Says Piyush Patel, Director, Amtech Power, “We have a commitment to service all our customers, to be at their doorstep within 72 hours. Our main theme is not guarantee or warranty. We are looking at offering more and more uptime to our customers. Giving guarantee or warranty doesn’t make sense if I make my customer suffer for five days. So the warranty doesn’t actually help him. Our company is more interested in offering maximum uptime to our customers irrespective of warranty or guarantee issues. That’s how we differentiate ourselves from competitors. “
Any manufacturer worth his salt has to offer presales and post sales support. Customers are more comfortable with manufacturers that offer them a solution instead of a plain box product. This can help marketers in up-selling or cross-selling products.
Support on product information can be provided through electronic direct mailers or regular newsletters to the customers. These newsletters can focus on new technologies, how an application or product can be leveraged optimally, real-time case studies, savings that could accrue, what would be the return on investment and other similar benefits. Many manufacturers even conduct road shows and seminars and symposiums to ensure that awareness levels remain high and that the customer feels closer to the technology.
Dinesh Aggrawal, Country Head, Anchor says that quality, reach and a wide network are three factors that are paramount in reaching out to customers. Says he, “We believed in the network. We even reached villages, and then started manufacturing switches that would meet the need of customers in these villages. And that has become a winning force for us. We have around 61 branches all over India and over 30,000 retail outlets and distributors who are capable of handling this total system.”
Joshi feels that it is necessary to aggressively encounter your competitors, as long as it is ethical. Manufacturers need to show always that it has a basket full of products, which will certainly give better solutions to customers. Manufacturers should make the customers feel that they are not selling just a box but solutions that will enable the customer to increase efficiency in his business.
D. B. Power, for instance, recently launched its Digital Active Power Factor Corrector (DAPC), which is a pioneering effort from DB’s house of R&D. Says Vinayak Joshi, DGM Marketing, D. B. Power, “Basically, this is a sort of import substitution and this product will certainly serve the industry in a much better manner. Because no matter which industry it might be, be it an IT organization or an industrial unit, you don’t have any control over the load coming into the premises. And at that time power scarcity is tremendous. DAPC will help organizations tackle this issue effectively. DAPC can reduce the harmonic disruption, power factor by which he could be able to save his energy which is a scarcity anywhere in the country.”
Normally, the industry looks to a product from two points of view--returns on investment and how much time it will take to get back the benefits of the product. So whenever manufacturers launch such products they should ensure the customer about the value they get for the money they are investing.
R&D
Indian manufacturers could depend on the local industry to meet their requirements for various product components instead of just importing and then assembling. The common complaint is that investments required are huge and the business volume doesn’t justify the investments. However, several manufacturers have already dared to take on the classic chicken or egg situation and venture into hitherto untrodden territories. The Indian industry is growing and demand is likely to grow. But if India ever has to emerge as a manufacturing hub then the situation has to be tackled now. This will also ensure several side benefits. The R&D industry in India will get a direct shot in the arm. And India could reach the level of innovating and developing new technologies.
Amtech has already played a significant role in this area. In every available category the company has ensured features that differentiate it from existing products. Says Patel, “If you see the energy meters, we were the first ones to introduce prepaid energy meters with prepaid cards. In ballasts, we were the first ones to introduce electronic reliable ballasts. In switches, we keep innovating constantly in designs and the mechanism. This is the strategy we have adopted to stay ahead of the competition.”
Amtech is now focusing on automation because it believes that the future market is headed in this direction. Today, there is more electronics in the switches and every accessory. The accessories have become more intelligent. India has to move in this direction. Amtech already has a light automation product. According to Patel, it has a complete prototype ready for the entire home automation. “Feature wise it will be as rich as any other product in the world but it will be much cheaper than any multinational product,” says Patel.
The focus of R&D should be to keep pace with the latest technologies coming up worldwide and in addition to this, develop technology that will out us ahead in the race. Come manufacturers have collaborated with foreign manufacturers to develop products that will meet international standards. In several cases, the collaboration leverages the strengths of a particular entity to develop industry leading products in that category.
In the cables space, heat shrinkable is the latest technique in the cables space. But with times changing cold shrink is also coming into this space. The cold shrinkable cable accessories are made of imported silicon rubber material. They not only have excellent electric performance, such as high elasticity, but also excellent physical performance, a long life span and constant shrink pressure, and they don't need a flame or special tools for heating. Technology is changing because lots of new polymers are coming into this space. The science is changing. The basic standard is something that can stand up to 130 degree centigrade. However, Indian companies already boast products that can withstand 150 degree centigrade of continuous operation
Today, Indian companies have the facilities required to carry out all kinds of type testing. It is an open market and we need to have end-to-end solutions to be able to ask whatever the customer demands. Manufacturers should ensure that the need of the customer is clearly identified. Based in these needs, the R&D team can accordingly work on correct solutions and come out with good products. Says G. K. Banerjee, VP Marketing, Finolex, “We are conducting surveys and trying to understand the Indian market -- what the customer wants, where is the gap between demand and supply, is there a gap in expectations itself and whether customer wants something that is not available. We are trying to assess those things and working backwards to come out with a product which is required and suits the market.”
The main motto should be quality. Quantity can come later after quality is taken as a given. Focus on quantity which compromises in quality should be discouraged strongly. In the international market, the product quality can make or break a business. Says Naveen Kumar Deswal of DAV, “Quantity will automatically follow quality. We have incorporated that into our corporate culture. Every single entity within the organization should be convinced about the fact that there should be quality in whatever they do.”
CONCLUSION
Indian customers need reliable quality, backup service, and availability over the counter. The Indian market is an upcoming market. People’s demands are increasing – people want lavish products, automation, and manufacturers cab tap the opportunity to meet these demands.
To tap the global market, manufacturers here need to increase their manufacturing capacity. There have been many instances where several manufacturers have not been able to fulfill the demand in the Indian market. While competing with multinationals this can serve as a potential recipe for disaster. Manufacturers need to develop infrastructure in such a way that it should have mass manufacturing capacity.
Manufacturers can also look inward at the various growth opportunities within existing products and businesses. Instead of resting in the success of one product range manufacturers need to look at new products and ventures.
In today’s world where everything is changing, people are changing, companies are changing, technology is changing if you don’t change and keep pace with the times you are not going to survive for long. So we can’t sit on our laurels and be complacent. We have to move forward, and always bring in new products in the existing space as well.
Indian manufacturers can stay competitive in the global marketplace only through innovation. This in turn, leads to better production processes and higher quality products — quality that meets international standards. Indian manufacturers have an added advantage in the form of cost effectiveness, as the wages here are much lower than those offered in more developed nations, thereby, directly affecting the end price of the product.
R&D activities serve as incubators for the new ideas that can lead to new products, processes, and industries. Although they are not the only source of new innovations, R&D activities conducted in industry-run laboratories and facilities are the source of many important new ideas that have shaped modern technology.
Industries that traditionally conduct large amounts of R&D have met with greater success in foreign markets than those that are less R&D intensive, and they have been more supportive of higher wages for their employees. Moreover, trends in industrial R&D performance are leading indicators of future technological performance.
MARKETING STRATEGIES
Most manufacturers are following the strategy of tapping the potential in the domestic market before foraying into the international market. By leveraging the opportunities presented by the domestic market, manufacturers can gain enough volumes to recover the cost of production. And for larger profits the manufacturer can then look at alternate markets. The domestic market also offers manufacturers the option of experimenting with their innovations. Domestic customers have been exposed to international standards and hence have become as demanding as customers from the more developed markets. Hence, if a product doesn’t find acceptance in the domestic market the likelihood of it doing so in the global market place is quite slim. Manufacturers can leverage the feedback it receives from local customers to improve product quality and functionality. Hence, many manufacturers are spreading their marketing network all over India irrespective of the size of the market.
Another aspect that has come to differentiate manufacturers is the quality of service provided by them. Today, product quality more or less matches international standards and are at par. The competition is now on the quality of service and support provided by manufacturers. Says Piyush Patel, Director, Amtech Power, “We have a commitment to service all our customers, to be at their doorstep within 72 hours. Our main theme is not guarantee or warranty. We are looking at offering more and more uptime to our customers. Giving guarantee or warranty doesn’t make sense if I make my customer suffer for five days. So the warranty doesn’t actually help him. Our company is more interested in offering maximum uptime to our customers irrespective of warranty or guarantee issues. That’s how we differentiate ourselves from competitors. “
Any manufacturer worth his salt has to offer presales and post sales support. Customers are more comfortable with manufacturers that offer them a solution instead of a plain box product. This can help marketers in up-selling or cross-selling products.
Support on product information can be provided through electronic direct mailers or regular newsletters to the customers. These newsletters can focus on new technologies, how an application or product can be leveraged optimally, real-time case studies, savings that could accrue, what would be the return on investment and other similar benefits. Many manufacturers even conduct road shows and seminars and symposiums to ensure that awareness levels remain high and that the customer feels closer to the technology.
Dinesh Aggrawal, Country Head, Anchor says that quality, reach and a wide network are three factors that are paramount in reaching out to customers. Says he, “We believed in the network. We even reached villages, and then started manufacturing switches that would meet the need of customers in these villages. And that has become a winning force for us. We have around 61 branches all over India and over 30,000 retail outlets and distributors who are capable of handling this total system.”
Joshi feels that it is necessary to aggressively encounter your competitors, as long as it is ethical. Manufacturers need to show always that it has a basket full of products, which will certainly give better solutions to customers. Manufacturers should make the customers feel that they are not selling just a box but solutions that will enable the customer to increase efficiency in his business.
D. B. Power, for instance, recently launched its Digital Active Power Factor Corrector (DAPC), which is a pioneering effort from DB’s house of R&D. Says Vinayak Joshi, DGM Marketing, D. B. Power, “Basically, this is a sort of import substitution and this product will certainly serve the industry in a much better manner. Because no matter which industry it might be, be it an IT organization or an industrial unit, you don’t have any control over the load coming into the premises. And at that time power scarcity is tremendous. DAPC will help organizations tackle this issue effectively. DAPC can reduce the harmonic disruption, power factor by which he could be able to save his energy which is a scarcity anywhere in the country.”
Normally, the industry looks to a product from two points of view--returns on investment and how much time it will take to get back the benefits of the product. So whenever manufacturers launch such products they should ensure the customer about the value they get for the money they are investing.
R&D
Indian manufacturers could depend on the local industry to meet their requirements for various product components instead of just importing and then assembling. The common complaint is that investments required are huge and the business volume doesn’t justify the investments. However, several manufacturers have already dared to take on the classic chicken or egg situation and venture into hitherto untrodden territories. The Indian industry is growing and demand is likely to grow. But if India ever has to emerge as a manufacturing hub then the situation has to be tackled now. This will also ensure several side benefits. The R&D industry in India will get a direct shot in the arm. And India could reach the level of innovating and developing new technologies.
Amtech has already played a significant role in this area. In every available category the company has ensured features that differentiate it from existing products. Says Patel, “If you see the energy meters, we were the first ones to introduce prepaid energy meters with prepaid cards. In ballasts, we were the first ones to introduce electronic reliable ballasts. In switches, we keep innovating constantly in designs and the mechanism. This is the strategy we have adopted to stay ahead of the competition.”
Amtech is now focusing on automation because it believes that the future market is headed in this direction. Today, there is more electronics in the switches and every accessory. The accessories have become more intelligent. India has to move in this direction. Amtech already has a light automation product. According to Patel, it has a complete prototype ready for the entire home automation. “Feature wise it will be as rich as any other product in the world but it will be much cheaper than any multinational product,” says Patel.
The focus of R&D should be to keep pace with the latest technologies coming up worldwide and in addition to this, develop technology that will out us ahead in the race. Come manufacturers have collaborated with foreign manufacturers to develop products that will meet international standards. In several cases, the collaboration leverages the strengths of a particular entity to develop industry leading products in that category.
In the cables space, heat shrinkable is the latest technique in the cables space. But with times changing cold shrink is also coming into this space. The cold shrinkable cable accessories are made of imported silicon rubber material. They not only have excellent electric performance, such as high elasticity, but also excellent physical performance, a long life span and constant shrink pressure, and they don't need a flame or special tools for heating. Technology is changing because lots of new polymers are coming into this space. The science is changing. The basic standard is something that can stand up to 130 degree centigrade. However, Indian companies already boast products that can withstand 150 degree centigrade of continuous operation
Today, Indian companies have the facilities required to carry out all kinds of type testing. It is an open market and we need to have end-to-end solutions to be able to ask whatever the customer demands. Manufacturers should ensure that the need of the customer is clearly identified. Based in these needs, the R&D team can accordingly work on correct solutions and come out with good products. Says G. K. Banerjee, VP Marketing, Finolex, “We are conducting surveys and trying to understand the Indian market -- what the customer wants, where is the gap between demand and supply, is there a gap in expectations itself and whether customer wants something that is not available. We are trying to assess those things and working backwards to come out with a product which is required and suits the market.”
The main motto should be quality. Quantity can come later after quality is taken as a given. Focus on quantity which compromises in quality should be discouraged strongly. In the international market, the product quality can make or break a business. Says Naveen Kumar Deswal of DAV, “Quantity will automatically follow quality. We have incorporated that into our corporate culture. Every single entity within the organization should be convinced about the fact that there should be quality in whatever they do.”
CONCLUSION
Indian customers need reliable quality, backup service, and availability over the counter. The Indian market is an upcoming market. People’s demands are increasing – people want lavish products, automation, and manufacturers cab tap the opportunity to meet these demands.
To tap the global market, manufacturers here need to increase their manufacturing capacity. There have been many instances where several manufacturers have not been able to fulfill the demand in the Indian market. While competing with multinationals this can serve as a potential recipe for disaster. Manufacturers need to develop infrastructure in such a way that it should have mass manufacturing capacity.
Manufacturers can also look inward at the various growth opportunities within existing products and businesses. Instead of resting in the success of one product range manufacturers need to look at new products and ventures.
In today’s world where everything is changing, people are changing, companies are changing, technology is changing if you don’t change and keep pace with the times you are not going to survive for long. So we can’t sit on our laurels and be complacent. We have to move forward, and always bring in new products in the existing space as well.
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